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Discretionary Spending

Function 050 - National Defense

Cancel the Littoral Combat Ship Program

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

(Billions of dollars)

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-2018

2014-2023

Change in Spending

Budget authority

0

0

-1.4

-1.5

-1.5

-2.3

-2.5

-2.7

-3.0

-3.4

-4.4

-18.3

Outlays

0

0

-0.2

-0.5

-0.8

-1.3

-1.7

-2.2

-2.6

-3.0

-1.5

-12.3

Note: This option would take effect in October 2015. Estimates of savings displayed in the table are based on the fiscal year 2014 Future Years Defense Program and the Congressional Budget Office’s extension of that program.

The Navy plans to buy 36 littoral combat ships (LCSs) over the next 13 years to complete its planned force of 52. The ship is intended to perform three types of missions—countermine, antisubmarine, and anti–surface ship operations—in the world’s coastal regions. The Navy is building two versions of the ship: a steel monohull and an all-aluminum trimaran. The ships would carry interchangeable mission packages, which are being developed and built separately. (Mission packages are the primary combat systems and associated equipment put on the ship to perform one of the three stated missions.) As of October 2013, the Navy has built two of each version of the ship; an additional 20 ships are under construction or expected to be built as part of existing contracts through fiscal year 2015. Under its 2014 shipbuilding plan, the Navy would purchase 21 ships between 2016 and 2023 and complete all 52 ships by 2026.

This option would limit purchases of the LCS to the 24 now built or under contract, canceling the program thereafter. Doing so would reduce outlays by $12 billion from 2016 through 2023 (and $6 billion more beyond 2023) as a result of not purchasing additional LCSs as well as purchasing fewer mission packages, the Congressional Budget Office estimates.

Since the LCS program began in November 2001, the ship has been criticized for its cost, design, construction, and mission effectiveness. The program’s first four ships cost more than twice what the Navy originally estimated. Since then, the costs of those ships (as set in two contracts for 10 ships each) have declined considerably and are on course to satisfy per-vessel cost caps for the LCS program established by the Congress, but production remains behind schedule.

One rationale for canceling the program is that early reviews of both variants of the LCS raised questions about the ships’ performance in conducting missions as defined in the Navy’s overall strategy document, A Cooperative Strategy for 21st Century Seapower. The Navy’s core missions are forward presence (routinely operating ships overseas), deterrence, sea control, power projection, maritime security, humanitarian assistance, and disaster response. Internal Navy assessments and the LCS’s concept of operations—a document that explains how the ship will perform its missions—currently rate the LCS poorly for being able to contribute to forward presence and for sea control and power projection using its primary mission packages. Those core missions differ somewhat from the three primary LCS missions, but some critics argue that if the LCS cannot contribute effectively to the missions outlined in the Navy’s strategy document, then the program should be canceled.

Also, in contrast to some comparably sized ships in foreign navies, the LCS does not carry much firepower. In addition, the Department of Defense’s Office of Operational Test and Evaluation has raised concerns about the ability of the LCS to continue to perform its missions after being hit in a hostile environment, even though the LCS’s concept of operations states that the ships can operate independently in a high-density, multithreat environment. Testing has also indicated problems with reliability and performance in some key systems, such as the ships’ guns, particularly when operating at high speeds (as would be likely in engagements with small, fast attack boats). Finally, other Navy assessments indicate that the greatest need for the LCSs is for the ones that perform countermine missions; with 24 ships in the fleet, the Navy will already have substantially more countermine capability than today’s fleet provides.

Canceling the LCS program would have several disadvantages, however. Both variants of the LCS represent innovative additions to the future force at a price much lower than that of other shipbuilding programs, and thus far no alternatives have been put forth that could perform its three types of missions more effectively and at a lower cost. Virtually every new class of surface combatant over the past 30 years—Spruance destroyers, Oliver Hazard Perry frigates, Ticonderoga cruisers, and Arleigh Burke destroyers—was initially criticized over its capabilities and costs but, when the construction was finished and the problems fixed, was regarded as a valuable component of the Navy’s fleet. Also, the ship’s sea frame (the ship itself) and interchangeable mission packages give it considerable flexibility to adapt as the security environment evolves over the ship’s 25-year service life. In addition, canceling the program would not eliminate the missions the LCSs would be needed to perform; other existing ships or newly designed ships would have to perform any missions that the 24 LCSs could not.

Moreover, in an era of tight funding, the LCS represents a relatively inexpensive way to increase the fleet’s size to reach the Navy’s goal of more than 300 ships. Although the LCS may not be able to perform some missions as effectively as larger and more-expensive ships, it is a key component of the Navy’s planned force structure: The Navy will be able to make use of the ships for maritime security operations and other, noncore missions such as engagement with allies. At $550 million, the average cost of an LCS with a mission package is one-third as expensive as an Arleigh Burke destroyer and cheaper than what it would cost to build a new Oliver Hazard Perry frigate today.